Highlights:
The sell-off of Bitcoin intensified following a 25 basis point rate cut by the Federal Reserve.
The decline in the crypto market indicates that traders are considering macroeconomic challenges like a slowing jobs market and inflation, despite expectations of continued interest rate cuts into 2026.
The price of Bitcoin (BTC) dropped to $109,200 just before Wednesday’s decision by the US Federal Reserve to decrease interest rates by 25 basis points. While some traders might have expected a risk-off sentiment before Fed Chair Jerome Powell’s announcement, BTC’s 6% fall from its rally at $116,400 on Monday seemed more pronounced than anticipated, particularly since analysts largely expected the 25 basis point cut.
The current Fed dot plot suggests a baseline of three rate cuts in 2025. Goldman Sachs analysts project at least two further 25 basis point cuts by March and June of 2026, aiming for a Federal Reserve benchmark of 3% to 3.25%. This outlook implies that Bitcoin’s short-term price movement is at odds with traders’ expectations.
Hyblock, a cryptocurrency analytics firm, noted:
“Historical trends indicate that FOMC meetings often lead to a dip in BTC prices, followed by a rebound. This pattern was evident in both scenarios: no rate change and the last cut. If the price declines post-FOMC and bullish signals arise, like strong buy orders, it could provide solid opportunities for investors.”
With the consensus leaning towards future rate cuts, investors are shifting their perspective to “what’s next after the cuts.” Factors like increasing job layoffs in the US, the long-term consequences of President Trump’s trade policies, and whether the AI sector is in a bubble or grounded in solid fundamentals are of significant concern to traders.
Related: Price forecasts 10/29: BTC, ETH, BNB, XRP, SOL, DOGE, ADA, HYPE, LINK, BCH
Traders will be eager for these issues to be addressed in Powell’s FOMC press conference on Wednesday, as they are likely to influence Bitcoin’s price behavior more than the anticipated interest rate cut, which was already factored in with a full consensus on a 0.25% reduction.
A significant update in the FOMC statement was the confirmation that the Fed will stop reducing its balance sheet on December 1, signaling the conclusion of quantitative tightening.
This article does not offer investment advice or recommendations. All investment and trading actions involve risk, and readers should carry out their own research before making decisions.
